The increased popularity of the World Wide Web has led to an explosion in catalog and online shopping. The growth in e-commerce reflects in part increased purchases from veteran online shoppers, deeper Internet penetration across the country and the increased number of familiar bricks-and-mortar retailers online.
Some of the benefits to purchasing products online include the ability to avoid crowds, perform quick price comparisons across multiple sellers, and access a wider selection of products. However, there are drawbacks to purchasing goods through a retailer web site. One drawback is the inability to inspect an item before making the purchase. A consumer that buys a product offline at a traditional retail store usually has the opportunity to inspect the color, size and quality of workmanship of a good before the purchase is made. In contrast, when a consumer shops online their decision to purchase is based largely on a written description of the product and/or a photograph of the item. No opportunity to inspect the product occurs until after the product is purchased and shipped to the consumer. As a result, many products that are purchased online are returned.
A traditional process by which a product is shipped via a commercial carrier is illustrated in FIG. 1. In Step 100, a customer places the good to be shipped in a box or other shipping container. In Step 110 the customer completes a shipping label, which includes, among other things, the destination address for the package. The shipping label may be written directly on the package to be shipped or may be a preprinted shipping label form with spaces where the customer enters the origination shipping address and a destination shipping address.
In Step 120, the customer affixes the shipping label to the package, or in some cases the customer may skip the shipping label step and write the shipping information on the package to be shipped.
In Step 130, the package is placed into the carrier system. In most cases, the customer physically takes the package to one of several drop off locations operated by a carrier.
In Step 140, the customer is billed for and pays the shipping fee associated with shipping the package. The shipping fee is generally based on the size of the package and the locations of the origination and destination addresses. Finally, in Step 150 the carrier delivers the package to the destination address.
The traditional shipping process illustrated in FIG. 1 remains a viable model that commercial carriers still use today. This shipping process, however, is not particularly well suited to the Internet sales model and, more particularly, to the return of goods purchased from a website. As indicated above, goods purchased over the Internet are often returned because the buyer has not had an opportunity to inspect the item prior to the purchase. Under the traditional shipping method, the customer must re-package the good to be returned, complete a shipping label, locate a carrier drop off facility, deliver the good to the facility and, in some cases, pay a return shipping fee. Not surprisingly, many of the customers who attempted to save time by purchasing a good over the Internet or through a catalog become dissatisfied when they are forced to go through the time-consuming and sometimes costly process of returning a good using the traditional shipping method described above.
In an effort to streamline the return of goods to a merchant, commercial carriers have offered alternative shipping solutions. One such alternative is known as a call-tag system 100. FIG. 2 illustrates a call-tag system 100 that improves on the traditional process described above in that it provides for carrier pick up of the package and allows the merchant to pay the return shipping fee. The system 100 includes a merchant computer 200, a carrier computer 210, a buyer 220 and a local carrier facility 225. In addition, a merchant database 240, a carrier facility database 250 and a carrier call-tag application 260 reside on the carrier computer 210.
The operation of a call-tag is illustrated in FIG. 3. In Step 300, a buyer 220 purchases a good from a merchant and the merchant ships the good to the buyer 220 via a carrier. In Step 310, the carrier delivers the good to the buyer 220. In Step 320, the buyer 220 decides to return the good and notifies the merchant of that decision. In response to the buyer's return request, the merchant sends an electronic call-tag request 265 via the merchant computer 200 to the carrier computer 210 (Step 330).
The call-tag request 265 is an electronic file that includes, among other things, the buyer address and a merchant identification number. In Step 340, the call-tag application 260 receives the call-tag request 265 and queries a merchant database 240 with the merchant identification number to obtain merchant-specific information such as the merchant's shipping address and billing account number.
In Step 350, the call-tag application 260 uses the buyer address from the merchant's call-tag request to query the carrier facility database 250 to determine which carrier facility is responsible for delivery and pickup for that the buyer address (the local carrier facility 255). In Step 360, the call-tag application 260 generates a shipping label and transmits it to the local carrier facility 255. The shipping label uses the buyer address (from the call-tag request 265) as the origination shipping address and the merchant address (from the merchant database 240) as the destination shipping address.
In Step 370, the call-tag application 260 bills the merchant for the cost of shipping the good from the buyer 220 to the merchant. Depending on the merchant's preference, the shipping fee may be deducted directly from a merchant account or the merchant can be separately billed. In Step 380, the carrier sends a driver from its local facility 225 to the buyer address. The driver picks up the package with the good to be returned, affixes the shipping label to the package and, delivers the good to the merchant address (Step 390).
The call-tag system 100 described above improves upon the traditional shipping process because the merchant pays the shipping costs and the package is picked up directly from the customer address. The system is limited, however, in that the merchant may ship the good that is being returned only to the merchant address or to another preselected address that the carrier has entered in the merchant database. In short, call-tag systems known in the art do not allow a merchant to specify a unique destination shipping address.
The effect of this limitation is illustrated in the context of a purchase made through an online auction. Online auction purchases, like sales through Internet retailers, have grown in popularity with the Internet. Unfortunately, auction fraud is also booming. At present, auction fraud ranks as the most common type of Internet scam and accounts for more than half of all consumer complaints on the Internet, according to the Federal Trade Commission (FTC).
To combat the problem of fraud in online auctions and other types of person to person sales over the Internet, online escrow services have arisen. FIG. 4 illustrates a typical online purchase using an escrow service. In Step 400, a buyer and seller agree to a purchase. In Step 410, the buyer mails the payment to the escrow service, which verifies the payment and alerts the seller that payment has been received. In Step 420, the seller ships the good to the buyer. In Step 430, the buyer receives the good and an agreed-upon inspection period (typically two days) begins. Finally, in Step 440, the buyer notifies the escrow agent of receipt of the good and authorizes the release of the payment to the seller.
A benefit of this process is that the buyer has the option of returning the good anytime within the inspection period. To do so, the buyer notifies the escrow agent of the return and ships the product back to the seller. During the return, the escrow agent retains control of the purchase money until it receives confirmation from the seller that the good product has been returned. In this way, both the buyer and seller retain some degree of control and protection as the transaction is fulfilled.
Much of the escrow process is dependent on timely shipping. Unfortunately, neither the traditional shipping process or the call-tag system 100 meets the needs of this business model. Typically, the escrow agent receives a fee for its role as a facilitator in the transaction. Part of that role is to handle the shipping fees as the product is shipped from the seller to the buyer and from the buyer to the seller in the case of a return. Under the traditional shipping process, the party that is shipping the good has the responsibility of paying the shipping fees. In addition, the shipper is obligated to package the product and deliver the package to a carrier drop off facility.
Nor does the call-tag system 100 fulfill the shipping needs of this online escrow business model. In the call-tag system 100, a merchant can pay to have a package picked up from a customer, but the merchant does not have the ability to specify a destination address. Thus, if the facilitator assumed the role of the merchant in a call-tag shipping system, the facilitator could only have the product shipped to the facilitator address. In other words, the call-tag system 100 does not permit a facilitator to request that a package be picked up from a first address and delivered to a second address where neither the first or second address is the address of the facilitator.
An unsatisfied need therefore exists for an improved shipping system that overcomes deficiencies in the prior art, some of which are discussed above.